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Capital Gains Tax Rates for 2023 and 2024

Overview

Capital gains tax is a tax on the profit you make when you sell an asset, such as a stock, bond, or real estate. In the United States, capital gains are taxed at different rates depending on how long you have held the asset. Long-term capital gains are taxed at lower rates than short-term capital gains.

Long-Term Capital Gains Rates

For 2023 and 2024, the long-term capital gains tax rates are as follows: * 0% for taxpayers in the 10% and 12% tax brackets * 15% for taxpayers in the 22%, 24%, and 32% tax brackets * 20% for taxpayers in the 35% and 37% tax brackets

Short-Term Capital Gains Rates

Short-term capital gains are taxed as ordinary income, which means they are taxed at the same rate as your other income. The ordinary income tax rates for 2023 and 2024 are as follows: * 10% for taxpayers in the 10% tax bracket * 12% for taxpayers in the 12% tax bracket * 22% for taxpayers in the 22% tax bracket * 24% for taxpayers in the 24% tax bracket * 32% for taxpayers in the 32% tax bracket * 35% for taxpayers in the 35% tax bracket * 37% for taxpayers in the 37% tax bracket

Conclusion

Understanding capital gains tax rates is important for investors and taxpayers. By knowing the tax rates that apply to your investments, you can make informed decisions about when to sell your assets and how to minimize your tax liability.

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